On January 11, The International Finance Corporation, (IFC), a member of the World Bank Group signed an advisory services agreement with the Ministry of Construction (MoC) to design and implement a public-private partnership (PPP) transaction for an elevated expressway toll road in Yangon. According to the agreement, the MoC has appointed IFC as the exclusive lead advisor for the 20.5 km four- lane, north-south elevated expressway toll road project in Myanmar’s largest population and commercial center. As part of the transaction, IFC will undertake due diligence and structure an internationally competitive tender to select a qualified private sector developer with established experience in the efficient construction, management, operation and maintenance of similar facilities.
The expressway project is expected to foster economic development by improving connectivity in Yangon for goods and services between the Yangon Port and Thilawa Special Economic Zone in the South, and the Yangon International Airport, Yangon Industrial Park and the Yangon to Mandalay expressway in the North. It will also reduce costs that are triggered by lower productivity and higher vehicle operating costs due to heavy traffic congestion along the city’s south-north routes.
“ L a r g e – s c a l e i n v e s t m e n t i n infrastructure, especially in key transport areas, is critical for Myanmar’s sustainable economic growth as it improves the country’s access to markets and social services,” said Kyi Zaw Myint, Deputy Director General Planning, Minister’s Office, Ministry of Construction. “With IFC’s extensive experience in PPP transactions, if the project is successfully tendered and implemented, it could be used as a model for implementing the other segments of the planned inner and outer ring roads for Yangon.”
It is estimated that the country needs investments worth $48 billion in transportation infrastructure until 2030. The expressway project will facilitate about $350-$400 million of private investment in Yangon’s road infrastructure, helping reduce the capital investment burden on the government. The tender award to the winning bidder is expected to be granted by early 2019 and the road will be constructed over two to three years. “With IFC’s PPP transaction advice, the project will be structured in line with international best practices to create a competition-enabling market for qualified investors to come in,” said Vikram Kumar, IFC Country Manager for Myanmar. “As the first greenfield road PPP project adopting best international practices in Myanmar, it will set a precedent for developing transport PPP transactions to attract private sector investments. In addition, while improving connectivity and mobility for people and businesses across sectors, it will enhance the country’s competitiveness and productivity.”